Royal Mail Scandal Finally Shows the True Power of Litigation Funding
Key Contact: Hugh Hitchcock
Through the Justice for Sub-postmasters Alliance (JFSA), hundreds of sub-postmasters last week finally got a taste for victory when the criminal convictions of 39 sub-postmasters were quashed after years of expensive legal wrangling.
The JFSA was formed in 2009 to fight against a faulty computer system that mistakenly showed their branches as being in financial deficit. The system, named Horizon, was responsible for substantial numbers of sub-postmasters going to prison for false accounting, some losing their homes and even declared bankrupt.
Following the verdict, Paula Vennels, who was CEO of the Post Office from 2012 to 2019, stepped down from her board positions and calls are being made to strip her of her CBE.
After years of battling in and out of the courts, why the sudden victory for the claimants? One answer is litigation funding.
The benefits of litigation funding
In around February this year, the sub-postmasters were able to get Therium Capital Management (Therium) to back their claim. A typical defendant tactic in litigation such as this is to drag matters out and drive up costs as a means of deterring claimants from pursuing otherwise meritorious claims. Whilst it is unclear whether any such tactics were deployed in this case, the Royal Mail litigation demonstrates why litigation funding can be helpful in allowing claimants to go up against better-resourced corporate defendants. Without Therium’s funding in the Royal Mail case, it is possible that people’s lives and livelihoods may have been irreparably harmed.
At Acuity, we routinely recommend litigation funding to our clients, if it is appropriate because we understand its value. Often litigation funding forms part of an innovative funding solution which may include a contingency arrangement in appropriate cases. We recognise that funding alone should never be a barrier to the pursuit of a meritorious claim and with the right legal team, funding support, and innovative approach this should diminish or even eradicate the cost and risk of litigation.